Chris, Home Buyer in Vallejo, CA

Is the selling realtor of this short sale wasting our time?

Asked by Chris, Vallejo, CA Thu Apr 15, 2010

My husband and I put an offer on a short sale home in American Canyon on 4/7. Asking price was 360K we offered 370K, we have a preapproved loan,provided a 5K check for a deposit, and we have well over 20% saved to put down. The same day we put in an offer the house was taken off the market just a few hours later so I'm assuming it wasn't taken off the market due to our offer. I also found a website where it shows that the house is "contigent-show" does this mean there is already an offer that has been accepted? My realtor contacted the sellers realtor and was only told that we have a "good chance" and that all offers are being reviewed by the bank. I called the sellers realtor as well and he informed me that they are willing to still take offers. Can someone please help me here? I'm confused, if one website says that there is a sale pending why is the realtor still taking offers and if there really is a sale pending why haven't we been told so we can continue looking for a house?

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9
Richard's right. You're preapproved (which has a limited shelf life), you have over 20% to put down--what are you doing mucking around with a short sale? You realize, of course, that a short sale can take 5-10 months or more? You understand that you're not going to get regular updates--if any--on the status of your offer? So why on earth are you messing around with a short sale?

Meanwhile, the seller apparently is under the impression that he has no role in accepting offers. Huh? As Emelia says, in a short sale, the owner is the owner. It's a purchase transaction subject to lender approval. But first it goes to the owner.

Unless this is the absolute bargain of the century, just move on.

Hope that helps.
1 vote Thank Flag Link Thu Apr 15, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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Well, first you are putting an offer through a Realtor for another Realtors Listing. This tactic is used to drive the price up, we put in an all cash offer and put that our offer is subject to a 30 day close or whatever length it would take to fund the deal.
You need to understand that the listing Realtor is working for the 6% paycheck, which he will have to pay half to your Realtor, so he is taking offers from his side. The listing price of a Short Sale is nowhere close the Offer price I submit. That is just a market value, my offer is 62 to 80% for fair market value, or less because you can never ask the bank to lower an offer once you make one, but you can go up in the negotiations. I put into my contract that the deposit will be put in escrow when I have an accepted Short sale not before. I make 10 to 40 offers a month, and would never put $5,000 down on each deal.
If you want to buy a house and put a big down, just buy a standard deal. Don't do a Short Sale because you might just find the house of your dreams while you are waiting for a Short Sale to accept your offer, and you will not be able to do something else because you and your down payment are locked into a deal you may never get.
Good Luck,
Richard
obrienfinancial@gmail.com
1 vote Thank Flag Link Thu Apr 15, 2010
On a short sale the homeowner is still the seller. Listing Agent and seller need to pour over the offers and pick the best one and submit that one to the bank. The bank is technically not a party to the transaction and only needs to approve the terms as far as money is concerned. It is hard to believe that an agent would do a HUD for each offer and submit them all. Have your agent call the other agent and ask if your offer was the one picked by the seller. They only have one house to sell so they can not pick them all also ask your agent to determine how many short sales the other agent has closed.
1 vote Thank Flag Link Thu Apr 15, 2010
Hi Chris,
Short Sales are now becoming the norm of the market. Foreclosures are fewer due to the new HAFA program which is a more streamlined short sale process and standardized forms. Its about time something was done.
However, it will take a little longer for all parties involved in a short sale to understand and impliment the new process. Its been a while and I was wondering if you found a home in American Canyon?
Web Reference: http://www.rdillion.com
0 votes Thank Flag Link Tue Aug 17, 2010
If the house is pending it means that the sellers have taken an offer, yours or someone elses. IF yours has been taken, then you have a signed contract, do you? Your agent also must know if the listing agent is taking other offers will he/she kick yours out? do you know? Does your agent know what they are doing with short sales? do you know - have you asked?
How many offers does the house have and which one has been sent to the bank? Your agent should know and by now so should you! You should have been told where you stand so that you can either wait or keep looking - if you have not been told or do not know the answer to any of these questions! keep looking!!
Web Reference: http://merryserrano.org/
0 votes Thank Flag Link Wed Jun 9, 2010
I think you should look at the contract and see if there is any reason that would keep you from getting your deposit back then back out of the deal use the term this Offer was subject to partners approval, (Your partner can be your wife, family member or Friend) or you didn't get a walk throuhg inspection or something. the Seller is locked in to sell but the Buyer can back out for many reasons just find one. Then your next Offer Put $100 down and the rest of the Deposit will happen when you have an approved Short Sale. although a Short Sale takes a long time it is the only way to get a house at great price because most houses are overleveraged. Right now the right price is a discounted price becasue why would you want to pay top dollar for something that is on it's way back to the bank, So on a Short Sale take the Market Value and the most your Offer should ever be is 80% becasue you are going to wait 10 months +
Web Reference: http://www.we-pay-cash.net
0 votes Thank Flag Link Fri Apr 16, 2010
Chris,

Yes most of the inventory is short sales. I don't mean to discourage you but there needs to be a little more investigating when you are considering making an offer on a short sale. 1. If there is already an offer submitted to the lender don't waste your time. 2. How many lien holders and who are they do not put in an offer on any property that has 3 or more. I hate to say #3 because we all have to learn somewhere. 3. What experience does the listing agent have in negotiating the short sale. Or at a minimum that they work for a big real estate company that is big on training and mentoring. There are a several agents outsourcing the negotiation and they are passing the cost to the buyer 1/2%-1% of sold price.

As for the offer you have in right now - "the seller is in dark" they obviously don't know what they are doing. I would continue looking for a house until you are told, "Seller has accepted your offer (should not take longer than a week) and it will be submitted to the lender for approval" (This could be weeks or months).

Good luck!
0 votes Thank Flag Link Fri Apr 16, 2010
Richard, thank you for your time and helpful information. Don, thank you for your time and input as well. To answer your questions my husband and I didn't realize a short sale can take so long until after we put an offer on the house. We also did not realize that we wouldn't get regular updates or anything like that, that's why I posted this question here on Trulia. We're not familiar at all w/purchasing a short sale. The house we're in now is the first house we've ever bought, and it was so easy to buy it then (we've been here 6 yrs). Unfortunately on our part we didn't start looking into what purchasing a short sale entails until after we put an offer on the house. We unfortunately assumed that because a house is listed as a short sale or foreclosure the banks would be more than willing to sale these houses to qualified buyers as soon as possible but apparently not. I'm driving through neighborhoods w/ SO MANY vacant homes and majority of these homes are short sales and the very few that are not a short sale are extremely expensive. This is frustrating... So to answer your question as to why we’re messing with shorts sales is because we are raising 4 children and we hope to eventually put them through college so we don't want to end up living pay check to pay check to pay for an over priced house, so the prices of these short sales plus the sq. footage of the homes we're looking at of course appeals to us more so than the houses that are not being short sold. I am honestly baffled as to why it would take so long to purchase a short sale... And with the information I'm getting from everyone and other things I have been reading, it seems so discouraging to even bother looking at these shorts sales BUT the major problem is that almost every home listed is a short sale. Regarding the seller, I’m not sure why he’s under the impression that he has no input on the sale unless there’s some reason his listing agent can benefit from for keeping him in the dark??? Thanks again for your time.
0 votes Thank Flag Link Thu Apr 15, 2010
Thank you for your time Emelia. Unfortunately, now I'm feeling a little more confused. Reason being is that it happens to be that a very good friend of mine is a friend of the seller and she spoke w/him yesterday and asked if he has heard anything from his realtor about accepting an offer but the seller said that he has not heard anything from his realtor and that he has nothing to do w/accepting offers that it is all left up to the bank. I was also told by my realtor that in a short sale the Listing Agent would usually have to provide the bank with at least 5 different offers. The Listing Agent will not tell my realtor how many offers are being looked at either. Again, thank you for your time, and I hope you understand why I feel a bit confused.
0 votes Thank Flag Link Thu Apr 15, 2010
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